Case Study: Apple, Inc.Essay Preview: Case Study: Apple, Inc.Report this essayCase Study: Apple, Inc.Apple Inc. is a renowned technological company that designs and sells computer software, consumer electronics and provides online services. Some of the company’s hardware products include the iPhone smartphone, the conveyable iPod media player, and the Mac personal computer. Its computer software products include the Safari web browser and multiple iOS operating systems. The iTunes Store and the iOS App Store are some of the major online services provided by the company. The company is claimed to be the best at designing technological hardware and invention of new devices (Johnson et al., 2012). The success of Apple, Inc. is grounded in its inventive strategies which could be heavily borrowed by other technological companies to achieve similar success.
BackgroundApple Inc. was founded by three individuals: Steve Jobs, Ron Wayne and Steve Wozniak in 1976. Wayne, however, sold his shares and left the company. Wozniak designed Apple I, Apple’s first computer; it was presented to Hewlett Packard who declined pursuing the venture. The company persevered and developed the Apple II in 1978 which made good sales. Apple went public in 1980, comprising approximately 1000 employees at the time. After a stellar sales performance in 1984 due to production of the Macintosh computer, Apple suffered from a struggle for power among its senior executives which resulted in the departure of Steve Jobs and other senior officials. These sudden developments accelerated the deterioration of the company which endured substantial fiscal losses in the early 1990s (Johnson et al., 2012).
Steve Jobs returned to Apple Inc. in 1997, hired as an advisor after Apple Inc. purchased NeXT, Inc. Shortly after, he took over as the company CEO. His reinstatement marked the beginning of a series of revolutionary inventions by the company. The iMac was unveiled in 1998 and made monumental sales. Apple then later released the iPod in 2001 followed by the iPhone in 2007. The iTunes Store quickly became the leading source of music displacing Wal-Mart off this position. Due to such significant achievements, Jobs was continuously named the best CEO in the world by several famous magazines and analysts (Johnson et al., 2012).
StrengthsIt is necessary to evaluate the strengths of Apple which have facilitated the massive success that the company has experienced in its inventive endeavors. Apple is one of the most valuable brands in the world, exclusively contributing to 1.5% of the GDP of the U.S. (Khan et al., 2015). Apple products are highly trusted by a huge portion of the population due to their outstanding quality (Smithson, 2015). The most acclaimed company products are the iPhone and the iPod. The products and services provided by the company are also user-friendly, making them easy for use by the general public. The company, therefore, has a wide market to which it can introduce a new product at any time and be assured of making considerable sales.
Apple is also known for its exceptional pricing strategy which is favorable to consumers while ensuring the maintenance of bountiful profits. Having many diversified products, the company accrues massive revenue and is the company with the greatest value in assets according to Forbes. These revenues are used to fund further innovative strategies for the production of new or more efficient devices and software. This is illustrated by the regular release of new Apple products to the public; each upcoming one is uniquely original and applicable to a new aspect of life (Smithson, 2015). The intent nature of Steve Jobs also made the company recognized as a hub for state-of-the-art inventions. This has contributed to the vast popularity of the company.
WeaknessesIt is also necessary to establish the factors which limit innovation in Apple, Inc. One of Apple’s biggest weaknesses lies in its network of distribution (Smithson, 2015). Apple enforces a rigorous procedure for selection of authorized sellers of its products. Although this strategy gives the company greater control over distribution, it substantially limits the market outreach. This limitation is illustrated in that only 13 countries have direct sales locations for Apple products. Another significant weakness is the company’s overreliance on the iPhone and the iPod, being that they are the leading sources of income for the company. Therefore, if it were to happen that rivaling mobile phone manufacturers invented a product that overtook the iPhone or iPod in popularity, this would substantially affect the sales and consequently, the profitability of the company. Due to the existence of premium pricing, the sale of Apple products is also significantly limited to high-end markets
In summary, with Apple ’s highly focused and complex business model, as in other large companies with a significant size and sophistication, and as in other industries, innovation in a technology is often the fastest growing one in the world. Given the increasing importance of consumer research, Apple is likely to see increased opportunities to accelerate their adoption of this technology. We believe that Apple’s overall strategy and objectives are strong relative to competitors such as other smaller players such as Google, Apple II, and Google.
Apple’s new technology strategy does not rely on high-tech efforts that may appear very promising, or may involve significant back-door-building in the development of the product. In addition, there are many more factors that may, if not properly implemented, restrict competition and increase customer demands. In other words, the goal of the new strategy is to advance Apple’s mission in this area. The approach of the new strategy is likely to rely on more open and public information, which will allow greater public access for Apple and its product portfolio. We believe the technology strategy of the new strategy will be guided by: (1) increasing the ability of consumers and innovators to reach and experience Apple products and services; and (2) encouraging innovation on a global basis. We anticipate a new and competitive competitive ecosystem within the industry as our products and services become more widely available and more broadly available. We also anticipate the adoption of new technologies such as our wireless wireless product (WiFi Connect), which may increase the accessibility of Apple products, as well as our consumer offerings. At the same time, we anticipate new technologies requiring technology and resources available to Apple, and further technologies that demand greater investment to develop the technology, will become available.
In addition, while Apple has identified more opportunities to strengthen the existing business model, we believe Apple’s business model is much better positioned to benefit in the future. For instance, there is a very strong appetite for innovative, low-cost, high-performance business models where the overall user experience is better delivered through services, including with Siri, Siri+, and an improved user interface. There are also many businesses in which Apple has a larger user base, and our existing and future products could offer a better and more cost-competitive experience. We anticipate that the new approach of Apple’s strategy will focus primarily on products and services delivered through Apple’s products, and we believe Apple will have a better and better understanding of what people want from new and alternative businesses in the short to medium term if and when customers demand it. It is therefore conceivable that Apple will seek to broaden its product offerings to allow for more competitive products.
One of Apple’s most significant weakness is that it engages in highly paid relationships. In addition, many companies, with an average salary of $250,000 –$500,000 and an average product portfolio of 1 million pages in their online catalog, are actively looking for or pursuing large contracts to keep their businesses up and running. Apple’s most significant weakness is that it will find itself at a disadvantage when it comes to developing the value proposition for any new business because its ability to sell products and services to consumers will likely be in some way constrained by a desire to retain as much risk as possible. Apple is also subject to regulatory burdens in that many other businesses, including those in which Apple is a major shareholder, are subject to different regulatory standards and are subject to different accounting standards compared to other companies. For example, with the high-end market segment, the amount of revenue Apple will gain through products and services is less than its ability to sell them in the current price range and it is far less likely to be able to sell them through other competitors. In other words, Apple may have had an advantage in recent years when other companies with substantially similar operating margins were producing similar products or services, which has contributed to a reduction in costs.
A third risk is that our current product or service offerings may be used to make a profit margin of at least 10% as a result of increasing the amount of sales